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Wednesday, July 3, 2013

US delays introduction of key healthcare provision

The main provision of a landmark healthcare bill passed under President Barack Obama will take effect one year later than planned, his administration has said.

Employers now have until 2015 to extend healthcare benefits to their employees.

The move has been seen as a major concession to retailers and other businesses.

But it puts off the law's aim of giving coverage to nearly 50 million Americans without health insurance.

It also raises questions over whether other elements of the bill will be implemented on schedule, analysts say.
'We are listening'

"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," said Treasury Assistant Secretary Mark Mazur in a blog post.

"We have listened to your feedback and we are taking action."

Business groups hailed the unexpected decision, saying it would give employers more time to prepare for the changes without having to incur penalties. But it could mean that many Americans remain uninsured.

The 2010 Affordable Care Act, sometimes known as Obamacare, requires businesses with more than 50 workers to provide health insurance to all their full-time staff, or pay a series of increasingly severe penalties.

From 1 January 2014 companies would have had to pay $2,000 (£1,320) for each uninsured employee, but the measure will now not be introduced until 2015.

There is no fine for smaller businesses or for companies with workers who qualify for Medicaid, a government healthcare programme for the poor.

It was expected to have the greatest impact on hotel, restaurant and retail businesses that have many low-paid workers.

"We commend the administration's wise move," said National Retail Federation vice-president Neil Trautwein.

Correspondents say that while the change could upset some liberal and labour groups, it may also help Democrats in congressional elections in 2014.

Some Republicans said the decision was proof that the whole law should be repealed.

"The White House seems to slowly be admitting what Americans already know," said Mitch McConnell, the top Republican in the Senate. "Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans."

But White House adviser Valerie Jarrett wrote: "In our ongoing discussions with businesses we have heard that you need the time to get this right. We are listening."

Tuesday's delay to the introduction of the so-called employers' mandate does not affect another part of the healthcare law that requires all individuals to have their own insurance or pay a fine.

That provision had faced a legal challenge that eventually came before the Supreme Court last year. The justices ruled that the so-called individual mandate was constitutional.

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